Daily World Information for Friday, February 3rd, 2012

Economic and Financial Reports:
(7:30 am) Unemployment//non-farm payroll…………….....………est: 8.4%//+165,000
(7:30 am) Hourly wages//average workweek…………………..….est: +0.2%/34.4 hours
(9:00 am) Factory orders…………………………………………..…est: +1.5%
(9:00 am) ISM services index…………………………………….….est: 53.0

Political appearances: none scheduled

Commodities:
Early Metals: London Gold is trading $1760-$1761; Silver is pegged $34.17-$34.22; Copper is up about 2 cents.
Foreign currencies: the major currencies are mixed-higher as of this writing. It was a mixed session Thursday with the dollar losing ground to the Aussie and the Yen, but it gained vs. the other major foreign currencies. The markets were “cautious” due to uncertainties regarding Grecian and Portuguese debt issues, Fed Chairman Bernanke’s testimony and just ahead of U.S. jobs data. Market volumes were sluggish.
Crude Oil/energy products: the complex is trading mostly higher in the overnight trade. Oil futures finished at their lowest level in 6 weeks on falling demand and rising supplies. Products were mostly firmer, as refining demand improved along with crack spreads.
Cattle and Hogs: cash cattle traded generally steady to +$1in a moderate trade yesterday; most tops were between $123 and $126; the carcass cut-out fell $0.41 despite an improved load count of 313. Cash hogs traded mostly steady despite increased interior hog runs due to the warming trend in the Midwest. The carcass cut-out value fell $0.15 despite generally firm packer and retail demand. There were renewed stories of improved export from the Far East.
Grains and Oilseeds: the complex is trading mostly higher in the overnight market. Wheat futures fell solidly Thursday on stories that cold weather in Russia and the Ukraine (and possible “winterkill”) was overblown in magnitude. Soybeans/soy products advanced as this is “crush season” and there are continued worries over possible crop damage in South America. Corn firmed due to the lack of farmer and commercial offerings.

Geopolitical/political news: Federal Reserve Chairman Ben Bernanke on Thursday defended the U.S. central bank's policies against charges from Republican lawmakers they risked sparking inflation, saying the economy still needs plenty of support. Real estate mogul Donald Trump re-injected himself and his wealth into the Republican presidential race by endorsing Mitt Romney on Thursday, a day after the front-runner stumbled with remarks suggesting he was indifferent to America's poor. China is considering increasing its participation in the rescue funds aimed at resolving the European debt crisis, Chinese Premier Wen Jiabao told journalists on Thursday.

Domestic Equity markets: Investors largely took a wait-and-see approach on Thursday as stocks ended little changed ahead of Friday's key employment report, but tech shares rose after strong earnings from chipmaker Qualcomm. Shares of Qualcomm hit 12-year highs, but they fell off to close just 2% higher. MasterCard Inc rose 6.7%, after the payment processor beat analysts' estimates for the seventh straight quarter. Healthcare shares were among the losers. Drugmaker Merck & Co, the No. 2 U.S. drugmaker, said profit would be little changed in 2012; shares edged down 0.5%. Insurer Cigna Corp posted a lower-than-expected Q4 profit, hurt by performance in its disability and life coverage business and international plans. Cigna also forecast 2012 earnings below Wall Street's target, sending shares down 3.4%. The debt/equity markets will focus on today’s reports: the key employment figures, factory orders and the ISM services index. Tyson Foods, BEAM. Weyerhouser and Aon Corp lead the short list of companies scheduled to report Q4 results today.

European equity markets: the regional bourses are “mixed” (-0.6% in Norway to +1% in Greece) as of this writing. Commodities trader Glencore is in talks to buy mining group Xstrata in an all-share transaction that could create a combined group worth more than 50 billion pounds ($79 billion), shaking up the industry with its biggest deal to date. Temenos surged 9% in Switzerland--the biggest advance in the Stoxx-600 index after Misys said it has held talks with the Swiss software maker about an all-share merger. LVMH declined 0.8 percent to 125.40 euros, paring a rally of 9.9 percent so far this year. The Paris-based maker of Zenith watches and Louis Vuitton handbags reported that net income rose 1 percent to 3.07 billion euros ($4 billion) in 2011. Christian Dior SA, the luxury goods maker that holds astake in LVMH, lost 0.9% after saying 2011 profit rose to 1.28 billion euros. Mining issues Rio Tinto Group and BHP Billiton Ltd. slipped 1.7% and 1.4% (respectively) in early trading.

Asian/Pacific Basin Equities: the regional equity indexes ended mixed (-0.6% in South Korea to +0.9% in India). Reserve Bank of India Deputy Governor Subir Gokarn said the monetary authority will cut interest rates once it’s confident inflation will keep slowing. Hong Kong billionaire Li Ka-shing’s Hutchison Whampoa Ltd. agreed to buy Orange Austria in a deal valued at 1.3 billion euros ($1.7 billion), adding to more than $31 billion of investments in overseas mobile-phone operations. Panasonic Corp. widened its annual net-loss forecast to a record 780 billion yen ($10.2 billion), the latest Japanese electronics company to predict declining earnings because of Thai floods and a slow economy; Panasonic’s shares rose 1.2% before the announcement.

David Andalman
Market Analyst/Commodity Trading Advisor
DACS Research ™
1-800-859-1958
1-773-714-8361

**Trading futures involves significant risk of loss and is not suitable for everyone. Past performance is not necessarily indicative of future results. This is not an offer or solicitation to buy or sell futures.